What New York Contractors Must Know about The NY Wage Theft Prevention Act in 2026

Why is the WTPA now a general contractor's problem? 

The New York Wage Theft Prevention Act (WTPA) requires every employer to give workers a written wage notice at hire, a detailed wage statement each payday, and to keep payroll records for six years, with civil penalties that reach $5,000 per worker. For general contractors, the exposure no longer stops at their own payroll. Since January 2022, Section 198-e makes a prime contractor jointly and severally liable for a subcontractor's unpaid wages at any tier, and since September 2023 New York can prosecute wage theft as grand larceny. The state has already recovered more than $63 million for nearly 65,000 workers, and enforcement is only tightening. In that environment, the contractor who survives an audit is the one who can prove who worked, where, and for how long, which is exactly the verified record BiltOn is designed to produce.

This article is educational and is not legal advice. Confirm your obligations with employment counsel.

What does the New York Wage Theft Prevention Act require?

The WTPA requires three core practices from every private-sector employer in New York: a written wage notice at hire, a wage statement with every payment, and payroll recordkeeping for at least six years. The law took effect in 2011 and applies to all employers, with specific content and language rules that trip up contractors who treat it as a formality.

The requirements are precise, and partial compliance still counts as a violation. Each piece has its own content rules under New York's wage-theft and labor standards law.

The recordkeeping obligation is the quiet trap for a contractor running multiple sites and dozens of subcontractors. Accurate records require knowing who actually worked, on which site, for how long, which is exactly the data most GCs still capture by hand. The case for digital records that holds for safety holds here too, as we cover in the benefits of digitizing safety records for construction in NYC.

What are the civil penalties for WTPA violations in 2026?

WTPA civil penalties are steep and accrue per worker, per day. A wage statement violation can cost up to $250 per workday per employee, capped at $5,000 per employee in a private action, and a notice violation can reach $50 per workday per employee, also capped at $5,000. On top of that, employees can recover liquidated damages of up to 100% of unpaid wages, plus interest and attorneys' fees.

The math scales fast across a crew. The New York Department of Labor confirms the wage statement penalty at $250 for each workday a violation continues, up to $5,000 per employee. The notice penalty runs at $50 per workday per employee with the same $5,000 cap. Multiply those caps across thirty workers on a single subcontractor crew and a paperwork failure becomes a six-figure exposure before any unpaid wages are even counted.

Liquidated damages raise the ceiling further. Under the WTPA, an employee can recover liquidated damages of up to 100% of the total wages owed, increased from 25% under prior law, with an additional 15% if the employer defaults on a judgment for more than 90 days. These are not theoretical figures. New York wage theft accounts for nearly $1 billion in lost wages each year, according to Cornell's ILR School, and the state is actively recovering it.

The practical lesson for contractors is that wage compliance is now a documentation discipline. The employer who can produce clean, verifiable records is the one who survives an audit without writing a check.

When does wage theft become a crime in New York?

Wage theft became a felony-eligible crime in New York in September 2023. A law signed that month amended the Penal Law so prosecutors can charge wage theft as larceny, and it allows them to aggregate underpayments across multiple workers into a single grand larceny charge. For contractors, unpaid wages are no longer only a civil risk; they can be a criminal one.

The change is significant. Before 2023, wage theft was handled almost entirely through civil and administrative channels. The law signed by Governor Hochul on September 6, 2023 added wages to the Penal Law definition of property and let prosecutors pursue larceny charges. Legal analysts note that theft of $1,000 or more can support a grand larceny charge, and the ability to aggregate underpayments across workers gives prosecutors a powerful new tool.

Enforcement infrastructure grew alongside the criminal exposure. New York's enacted budget expanded the Department of Labor's authority to place liens on employer property, seize assets to satisfy unpaid-wage orders, and issue stop-work orders after a judgment. A stop-work order over a wage dispute carries the same schedule damage as a safety one, a risk we cover in how to avoid stop work orders in NYC.

Criminal exposure changes the calculus for executives. A wage dispute that once ended in a settlement can now reach a district attorney, which is why prime contractors need visibility into how their subcontractors pay, not just whether the work got done.

Why are general contractors liable for subcontractor wage theft?

General contractors are liable because New York Labor Law Section 198-e makes a prime contractor jointly and severally liable for wages and benefits unpaid by a subcontractor at any tier on a construction project. The law took effect January 4, 2022, and it applies regardless of whether the GC is a joint employer. A subcontractor's payroll failure is now the GC's financial problem.

This is the provision that reshaped contractor risk in New York. Under Section 198-e, enacted through Senate Bill S2766C, a worker employed by a subcontractor can pursue the prime contractor directly for unpaid wages, even when the GC had no direct relationship with that worker. The liability covers unpaid wages, benefits, and wage supplements, and it attaches without any joint-employer finding.

The exposure is real and growing. New York is enforcing aggressively across the construction sector, including a NYC Comptroller settlement of more than $500,000 from construction firms for wage theft and payroll fraud. When a sub two tiers down underpays a crew, the GC with the deepest pockets and the most to lose is the one a worker, the DOL, or a prosecutor pursues.

For a GC, the takeaway is that subcontractor wage practices are now your liability whether you can see them or not. The only defense is visibility and documentation.

How can general contractors protect themselves under Section 198-e?

General contractors protect themselves under Section 198-e by combining contractual protections with verifiable field data. Counsel typically recommends indemnification clauses, audit rights, and certified payroll requirements. Those clauses only work when the GC can confirm who actually worked, on which site, and for how long, which is where verified worker-level records turn a contract term into a real defense.

Employment lawyers point to a consistent set of safeguards. The strongest programs pair the legal language with operational proof.

That last row is where most GCs are exposed, because their attendance data comes from manual headcounts and swipe cards that can be passed or forgotten. Pat Feehan, VP of Construction at Vorea, described the old reality: "Before BiltOn, it was all daily reports and headcounts by hand. You hoped the numbers matched reality. But deep down, you knew they didn't." Those verified records also feed the intelligent workflows we describe in how safety directors use intelligent workflows.

As Omer Slavin, Co-Founder and CEO of BiltOn, frames it: "See every site, verify every worker, prove every record." Verified attendance does not replace payroll compliance or legal counsel. It gives the GC the independent evidence that turns contractual protections into a real defense.

What should New York contractors do before their next project?

Before the next project, New York contractors should confirm their own WTPA compliance, tighten subcontractor contracts with indemnification and audit rights, and put a verifiable attendance record in place. The combination of civil penalties up to $5,000 per worker, criminal larceny exposure, and Section 198-e liability means documentation is now the contractor's primary defense.

The regulatory direction in New York runs one way, toward more enforcement, higher penalties, and more liability flowing upstream to the prime contractor. A GC that treats wage compliance as a subcontractor's problem is carrying a risk it cannot see. A GC that can prove who worked, where, and for how long has turned that risk into a defensible record.

What that protection looks like depends on the seat you sit in. For compliance and legal leaders, it is an independent, six-year-grade record that backs up indemnification clauses and certified-payroll audit rights. For COOs and VPs of Operations, it is verified attendance and onboarding that close the gap between certified payroll and who was actually on site. For CFOs and heads of Risk, it is documentation that reduces exposure to civil penalties, criminal liability, and Section 198-e claims flowing up from subcontractors. For Safety and EHS leaders, it is the same verified worker record that powers safety compliance, now doing double duty on wage documentation.

Request a demo and we will show you how verified attendance strengthens your Section 198-e position. Bring your counsel; the record holds up to both.

Executive takeaway

The WTPA requires a wage notice at hire, a wage statement each payday, and six-year payroll records, with civil penalties up to $5,000 per worker. Since September 2023 wage theft can be prosecuted as grand larceny, with underpayments aggregated across workers, and since January 2022 Section 198-e has made prime contractors liable for subcontractors' unpaid wages at any tier. The defense, in every case, is contractual protection paired with a verified, independent record of who worked, where, and for how long. BiltOn is designed to be that record, giving the GC the verified attendance evidence that turns indemnification clauses and audit rights into a real Section 198-e defense.

Frequently Asked Questions

1. Who has to comply with the New York Wage Theft Prevention Act?

Every private sector employer in New York. The WTPA requires a written wage notice at hire, a detailed wage statement with each payment, and payroll recordkeeping for at least six years. On construction projects, prime contractors also carry liability for subcontractors' unpaid wages under Labor Law Section 198-e.

2. What are the penalties for not giving employees a wage statement in New York?

A wage statement violation can cost up to $250 per workday per employee, capped at $5,000 per employee in a private action, per the New York Department of Labor. Employees may also recover liquidated damages of up to 100% of unpaid wages, plus interest and attorneys' fees.

3. Can a general contractor be held responsible for a subcontractor's wage theft?

Yes. Since January 4, 2022, New York Labor Law Section 198-e makes a prime contractor jointly and severally liable for wages and benefits unpaid by a subcontractor at any tier on a construction project, regardless of joint-employer status. GCs commonly protect themselves with indemnification clauses, audit rights, and verified payroll and attendance records.

4. Is wage theft a crime in New York?

It can be. A law signed in September 2023 lets prosecutors charge wage theft as larceny and aggregate underpayments across multiple workers into a single grand larceny charge. Theft of $1,000 or more can support a felony charge, which means unpaid wages now carry criminal as well as civil exposure.

References

• New York State Department of Labor. (2026). Wage theft and labor standards law

• New York State Department of Labor. (2023). Guidelines for wage statement provisions (LS45)

• New York State Senate. (2025). Labor Law Section 195: notice and recordkeeping requirements

• New York State Senate. (2022). Labor Law Section 198-e: construction industry wage theft

• Office of Governor Kathy Hochul. (2023). Governor Hochul signs legislation strengthening wage theft penalties

• Office of Governor Kathy Hochul. (2024). Two years after major wage theft crackdown, more than $63 million recovered for nearly 65,000 workers

• New York City Comptroller. (2024). Comptroller's office secures $500,000+ settlement from construction firms for wage theft and payroll fraud

• Cornell University ILR School. (2024). Preventing wage theft

• Jackson Lewis. (2022). New York construction wage theft law: prime contractors responsible for subcontractors' failures

• Venable. (2022). How general contractors may avoid getting hammered under New York's construction wage theft law

• Sullivan & Cromwell. (2023). New York enhances criminal liability for wage theft

• Proskauer Rose. (2011). New York's Wage Theft Prevention Act increases employer obligations and penalties

• Seyfarth Shaw. (2011). New York State enacts new Wage Theft Prevention Act

• BiltOn. (2026). Benefits of Digitizing Safety Records for Construction in NYC

• BiltOn. (2026). How to Avoid Stop Work Orders in NYC

• BiltOn. (2026). How Safety Directors Use Intelligent Workflows